Search engine marketing is extremely detailed. Every aspect of a campaign needs to be tailored to the market you’re targeting, the search engines you’re advertising on, your company and brand identity, and a whole lot more. There are so many considerations when it comes to SEM that it can be difficult for a new marketer or an inexperienced marketing team to know where to begin. Fortunately, there are some universal best practices for anyone looking to create an effective and profitable campaign. One of those best practices is understanding the importance of choosing the correct cost-per-click (CPC) so that your advertisements are as effective as possible.
Why? Because not all CPVs are created equal – which means that If you use the wrong one, you could end up spending much more than you need to and not get anywhere near the return on investment (ROI) that you deserve.
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What is the Correct CPC?
A CPC is the amount you’ll pay every time someone clicks on your advertisement. It’s calculated based on several factors – such as the competitiveness of your industry, the value of your product or service, your desired click-through rate, your landing page experience, etc. The CPC you select will influence your entire campaign, so it’s important to choose one that’s appropriate. The correct CPC is the one that yields the best possible results for your budget – without going over it.
The goal of any SEM campaign is to drive as many clicks to your site as possible, while still remaining profitable. You want to drive clicks that will ultimately turn into customers (and ideally, lifelong customers). If you set your CPC too low, however, you run the risk of getting thousands of clicks from people who aren’t likely to purchase anything or to click again in the future. Higher-value clicks are better for your business, even if they cost you a little bit more in the short term.
Why Is the Correct CPC Important?
There are a few reasons why it’s important to use the correct CPC. First, it allows you to stay within your budget. If you set the CPC too high, you’ll be spending more than you need to. If you set it too low, you’ll be missing out on clicks that could have contributed to your bottom line. Another reason why it’s important to select the correct CPC is that it allows you to get the best possible return on investment (ROI) out of your campaign. If you set a low CPC, you’re going to get a lot more clicks – but you’ll be getting clicks from people who are less likely to convert. If you set a high CPC, you’ll get fewer clicks – but those clicks will be from high-value customers who are most likely to convert. It’s crucial to find the sweet spot that allows you to get the most value out of your campaign without going over budget.
How to Find the Correct CPC?
The best way to find the correct CPC is to start with your budget and work backwards. Selecting a CPC is a bit of a balancing act. You want to find a CPC that’s high enough to drive lots of clicks, but low enough that you don’t go over your budget. The easiest way to do this is to select a CPC that’s just below the maximum amount you’re willing to spend each day. Then, track your campaign over a period of time – checking in regularly to see how many clicks you’re getting, how many sales you’re generating, etc.
After a few days, you’ll have a pretty good idea of how many clicks you’re getting for each CPC. You should also keep an eye on your budget throughout the campaign. If you find that your CPC is driving too many clicks for the budget you’ve set, you can always lower it a bit to balance things out. Ultimately, there’s no one-size-fits-all formula for finding the correct CPC.
The Importance of Audience ROI When Selecting a CPC
When selecting a CPC, you should also keep your audience’s ROI in mind. When you’re creating an ad, you’re trying to get your potential customers to click on it. Those are the people you need to appeal to – not other marketers or search engines. So, you want to choose a CPC that will appeal to your customers – but not so much that it turns off other marketers. When selecting a CPC, you should always take into account your competitors’ ads as well.
You also want to make sure that your ad is appealing to search engines – so that it gets the most possible clicks. A lower CPC is always better for appeal, but a higher CPC can still get plenty of clicks – it just takes a little longer to build up momentum. In the long run, a high CPC will almost always pay off more than a low CPC.
When to Use a High CPC
There are a few scenarios that call for a high CPC. A high CPC is best for industries that have a high search competition – such as law, real estate, financial services, and insurance. Because these industries have such high search competition, you’re going to have a harder time getting your ads to show above your competitors’ ads unless you’re willing to spend more. If your industry has a high search competition, you might want to start with a higher CPC and then lower it over time as you get more clicks.
A high CPC is also a good option if you have a high-value product or service. If your product is extremely high-value and you want to make sure it gets in front of as many people as possible, you can start with a higher CPC and then lower it over time as you get more clicks.
When to Use a Low CPC
A low CPC is best for industries with low search competition, new or unestablished brands, and products that aren’t very expensive. If your industry has low or no search competition, a low CPC is a great way to get your ads in front of as many people as possible. You’ll get more clicks with a low CPC than a high one, which can help you build momentum quickly. A low CPC is also a good option if you have a product that’s relatively inexpensive. If you’re selling something that’s on the cheaper side, a low CPC will help you get your ads in front of as many people as possible.
The Bottom Line
Choosing the correct CPC is crucial to the success of your SEM campaign. It’s important to remember that while the best CPC is the one that yields the best results for your budget, it’s also important to have realistic expectations. Some industries have higher CPCs due to high search competition, and others have low CPCs due to low search competition. No matter what industry you’re in, you’ll never get as many clicks as you want unless you’re willing to spend enough money to get your ads in front of people. That said, don’t go overboard. It’s important to understand your budget – and to stick to it.
